Jorge Mota

The environment–growth dilemma: new evidence using a panel cointegration approach

ABSTRACT This paper contributes to the literature by extending the long-run and the causal relationship between greenhouse gas emissions, energy consumption and economic growth to a panel of 13 Portuguese economic sectors over the period 1975–2013. Hence, we test for the case of Portugal whether a relationship between economic activity and emissions exists, and what configuration that relation assumes, accounting for the structure of the economic activity, an aspect that has been neglected in previous literature. The sectoral approach followed in the study allows to account for the likely heterogeneity at sectoral level, to account for the structure of the economic activity and its changes over time, leading to an environment-economic analysis complementary to other findings. In this respect, the research on the relationship between emissions, energy consumption and economic growth carried out in this paper may be of relevance for policy-makers to better understand the energy–environment–growth dynamics. Such knowledge may support the design and implementation of more effective policies, which contribute to reduce emissions of greenhouse gases while preserving economic growth.

A Comparison between the Presence and Absence of Regulation in the Spanish Electricity Market

There is an important gap in the literature on the promotion of competition in electricity markets in what pertains to the analysis of two different streams: the absence and presence of regulation. Accordingly, the main objective of this study is to analyze the interactions among market power indexes, marginal costs, and bidding strategies in the two mentioned scenarios, for comparative purposes. The methodology used is based on panel cointegration methods. The results point to the significant inclusion of different bidding strategies in the retail market: (i) fuel prices exercise a differential impact on the power plants’ marginal costs, (ii) the marginal costs have a significantly positive effect on quantity sold and on net quantity, and (iii) the market power measures under regulation have a significantly positive long-term impact on the quantity sold and a negative impact on net quantity supplied in wholesale market. Although there is some literature on this issue, the main novelty of this article is the discussion of the regula‐ tory implications that could have been adopted in order to control and mitigate the market power, to encourage new investments in new technologies, and to recover sunk costs with the transition to a competitive market.

Long and short-run relationship among electricity and fossil fuel prices in the European industry sector

The cointegration relationship between electricity, gas, oil and coal was investigated using panel data and models considering the industrial sector in 22 countries in Europe between 1989 and 2013. A shorter period including the allowances market creation in Europe is also accounted (2005-2013). The empirical findings reported in the paper reveal that electricity and fuel prices are non-stationary and cointegrated series. As such, the present paper accounts for cross-section dependence when analyzing the electricity-fuel nexus. The results of this study indicate that there exists a stronger long run equilibrium relationship between electricity prices and fuel prices in the industry sector. These differences may be explained by the industry higher resilience in long run contracts within the energy sector.